Shelby County Mortgage Market Jumps 23 Percent

By Andy Meek

Bank of Bartlett’s mortgage company saw an uptick in mortgage volume in August compared to the same month in 2012, and the bank’s vice president said he expects demand from borrowers to persist and home prices to keep trending higher.

He’s not the only banker with reason to think that. The outcome at Bank of Bartlett is in line with what the county saw as a whole during August, when mortgage volume for the month was up 23 percent.

During the month, volume climbed to a little more than $157 million from $127.5 million in August 2012, according to real estate information company Chandler Reports, www.chandlerreports.com. The number of actual mortgages made during the month was 868, up a little from 845 in August 2012. The average mortgage amount rose to $180,901 last month from $150,915 in August 2012.

BYRD

Year to date, mortgage volume in Shelby County was about $959 million, up from about $830.5 million during the same period in 2012.

“Despite the increases in market rates, qualified borrowers can still lock in a great 30-year fixed-rate home loan,” said Justin Byrd, Bank of Bartlett vice president and controller. “The percentage of our loans made to refinance a home has dropped from approximately 40 percent to 10 percent, but volume has remained relatively strong. The number of homes sold and the average price of homes sold have both increased 11 percent over last year, and we believe the home prices will continue to rise.

“With the reported inventory of homes available for sale down to 3.8 months’ supply, according to recent home data, demand for those properties is driving up home values, and new development will likely begin to take place soon.”

August was a hot month in more ways than one, but July was hotter – at least in terms of local real estate – when mortgage totals across the board were even higher than they were in August. The 868 mortgages made in August was a drop from 948 in July. The average mortgage amount was down a little ($182,214 in July to $180,901 in August) and the total volume also fell, slumping from $172.7 million in July to a little more than $157 million in August.

The increase in mortgage activity from August 2012 to the same month this year, though, also mirrors the growth evidenced by other real estate indicators, including home sales. August was another month of a double-digit increase for local sales, when the county saw 1,709 home sales, up 15 percent from 1,483 sales in August 2012, according to Chandler Reports.

That trend may continue for a variety of reasons, including the persistence of low rates. Triumph Bank President and CEO Will Chase was at a Tennessee Bankers Association meeting a few days ago, and he said half the group said they don’t expect rates to change in a big way for a few more years.

That would mean an extended period of favorable conditions for borrowers.

Many local banks saw their mortgage totals mirror the broader increase in the county. Byrd’s bank, for example, saw its mortgage subsidiary grow its volume in August year over year, to $3.2 million from $2.9 million. Magna Bank’s volume also rose, from $11.6 million to $15.2 million.

First Tennessee Bank was an exception, with its August mortgage volume coming in at $2.1 million, down from $3.1 million in August 2012. Community Mortgage Corp. is generally at the top of the list from one month to the next when it comes to mortgage volume, and its volume was down, too, during August. Community Mortgage Corp.’s August volume was almost $9.6 million, down from about $12 million one year earlier.